Cascading Consequences of Fines and Fees on Rural Communities

This is the first in a series of analyses highlighting courts’ impact on the people they serve.

U.S. state and local governments impose court fines and fees and use what they collect to fund court operations, law enforcement, and other government services. Between 2018 and 2022, courts in 24 states assessed nearly $14 billion in fines and fees, with rural communities—home to roughly 46 million people—bearing a disproportionate burden compared with urban communities. At the same time, a growing body of evidence shows that fines and fees are an unstable and unreliable revenue source, yielding limited and declining net returns for courts. Analyses of New Mexico and Texas found that collected fines and fees averaged 59% of assessed amounts from 2012 to 2018. And in 19 states, median state collection rates fell by 33% from fiscal year 2018 to fiscal 2022, while imposing significant burdens on communities.

For many households, court debt becomes an added bill to pay on top of necessities like rent, transportation, utilities, and groceries. Just as missed rent or utility payments can trigger eviction or shut-offs, missed court payments often trigger cascading punitive sanctions—like driver’s license suspension, repeated court involvement, and arrest—that can destabilize employment, finances, and health. 

Court debt can lead to heightened job insecurity for rural Americans

As of 2019, an estimated 11 million people in the U.S. had lost their driver’s license due not to a driving infraction, but to court debt. While the largest number of debt-related suspensions occur in urban areas, low-income drivers in rural areas have some of the highest suspension rates in the country. 

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This is problematic for two reasons. First, rural communities tend to have higher, more volatile unemployment rates and fewer job opportunities. A suspended license can further restrict access to work, particularly in rural areas, which often lack reliable transit alternatives for getting to jobs or showing up for job interviews.

Second, while understudied, court debt-related license suspensions are associated with lost income. For example, in North Carolina, lost earnings statewide are between $6.5 billion and $8.8 billion one year after license revocation, or $13,000 and $17,600 per person. In Texas, estimated income lost is about $5.5 billion per year, or $12,700 per person. The impact is more severe in rural communities, which have higher rates of poverty than urban areas, making it even harder for people to pay what they owe.

Court debt traps rural residents in cycles of court involvement

The process of paying fines and fees can lock people into long periods of court involvement. Analyses of multiple counties in Illinois and Washington state found that financially strained individuals were caught in “an endless cycle of court surveillance” driven by mandatory payment compliance hearings that continued until their debt was fully paid. These hearings sometimes entailed hours at a courthouse, disrupting employment and reducing earnings. 

A missed payment or compliance hearing, either of which can result from the transportation and employment barriers created by license suspensions, can escalate the consequences. In many states, missing a payment or a compliance hearing can result in jail time. For instance, a study of five rural counties in Washington state found that four of the counties had 30% to 38% of all people booked into jail pretrial for reasons that included nonpayment of fines, compounding economic instability through lost wages and unemployment.

Such practices also strain court resources. In the Illinois study above, a rural judge described compliance hearings as repeatedly pulling “the judge and the prosecutor and the clerk … back to court again, and again, and again, to monitor compliance by individuals who are ordered to pay money that no one believes they have the ability to pay.”

Court debt can affect health outcomes for those in rural areas

The consequences of court debt extend beyond employment and ongoing court involvement. License suspensions, repeat court interactions, and arrests impose significant stress on individuals and households. Evidence also suggests that court debt undermines physical and mental health.

While the health effects of household debt are well documented, with court debt identified as a contributing factor, research specific to rural communities remains limited. One study using the Survey of Household Economics and Decisionmaking data and interviews—including rural respondents—found that individuals with court debt are more likely to report poorer health and difficulty affording necessary health care than those without.

For many interviewees, managing competing basic needs triggered chronic stress. When asked about prioritizing daily expenses, one rural respondent reported, “[There were] times I went without eating … I’d have to analyze every move, everything I did [down to the penny] … I still stress … that extra bill killed us.”

Financial and health stability operate reciprocally: Declining health can limit the ability to work or pay debts, and financial instability can restrict access to care. In rural communities, where residents already face substantial health disparities, heavy reliance on fines and fees raises particular concern.

How states are taking action to address consequences to rural constituents

The cascading effects of court debt in rural communities underscore the need for innovation. Several states with largely rural populations have taken action that is expected to help address these consequences. While further study is needed to understand their effects, the following approaches offer pathways to improve community well-being:

• Reduce license suspensions and arrests. In 2017, Mississippi—one of the 10 most rural states in the U.S.—became the first to end driver’s license suspensions for unpaid court debt, with the then-attorney general noting that without a license or reliable public transportation, individuals lose access to their jobs, child care, groceries, and medical care.
  
  Since then, at least 25 states and the District of Columbia have limited suspensions, including several highly rural states. A small number, including Kentucky and Vermont, also require judges to prove that nonpayment of court debt was willful before imposing incarceration or other sanctions.
• Implement ability-to-pay determinations. While no state has adopted acomprehensive ability-to-pay policy, several recognize the need to address when someone is unable to pay. Montana law requires judges to waive or modify fines and fees based on ability to pay and prohibits imposing them unless an individual will be able to pay.
  
  In New Hampshire, ability-to-pay determinations aren’t required, but people may request one, and the state has codified standards governing how judges conduct these proceedings and what evidence to consider in determining what a person can afford.
• Reduce or eliminate fees. At least 25 states have repealed some fees. In Oklahoma, where rural residents have faced higher fines and fees than urban residents, the state eliminated six court-related fees in 2025 after a study found that collection costs exceeded revenue.
• In 2023, New Mexico eliminated post-adjudication fees for state and municipal courts, with judicial leaders citing fee elimination as a best practice that promotes budget transparency and alleviates financial strain on low-income residents.

The consequences of court debt on rural communities can extend well beyond the courthouse, creating cascading challenges for households and local court systems. These examples illustrate how state leaders are beginning to respond and offer approaches that other states can explore to improve community well-being.

Darcy White works on The Pew Charitable Trusts’ courts and communities project.